Budget plan draws critique

Eric Kaler’s HEAPR funding proposal has received a range of reviews from lawmakers.

John Thomas

In response to consistent funding shortfalls, the University of Minnesota is adjusting its strategy for requesting building maintenance dollars from the state Legislature, and lawmakers have mixed thoughts on the approach.

Earlier this month, President Eric Kaler proposed decreasing the University’s request for Higher Education Asset Preservation and Replacement funding by $5 million next year. In return, he’s asking the state for an additional $5 million in the operating budget to address the maintenance and upkeep of University buildings — which are similar to the types of projects HEAPR funds would have covered.

While some University officials and state legislators have expressed support for this tactic, some lawmakers are concerned the request could add to the tax burden.

Kaler’s proposal is part of his 2016-17 biennial budget proposal, which the Board of Regents will vote on in October.

University leaders typically garner funding for building upkeep through HEAPR requests, but the Legislature has historically not met their desires per that route.

In the 2014 legislative session, state lawmakers met the University’s $100 million request with just a $42.5 million allocation, according to the University’s Office of Government and Community Relations.

In 2012, they funded a $90 million request to the tune of only $50 million.

Board Chair Richard Beeson said there needs to be a more effective way to maintain University buildings, like Kaler’s new tactic in requesting HEAPR funding.

“There is a gap between our level of funding and that which we’ve identified as needing to be invested,” he said. “We’ve got [hundreds of buildings]. It’s like a house — they all need some level of work at all times.”

Sen. Terri Bonoff, DFL-Minnetonka, said she approves of Kaler’s proposition because the University isn’t receiving enough funding for its buildings.

“I really like this,” she said. “I think we’re not keeping up.”

If the facilities aren’t maintained, she said, they’ll deteriorate over time and squander the initial investment.

But state Rep. Gene Pelowski, DFL-Winona, said he believes Kaler’s plan is a misuse of taxpayer dollars.

“This would be double dipping, so the University would be getting two HEAPR accounts instead of just one,” he said.

Since HEAPR funds are gathered from bonding bills and the University’s operating budget is funded by taxpayer dollars, Kaler’s proposal would increase the tax burden, Pelowski said.

“I find this request to be unconscionable,” he said. “If the University wants to pay cash for HEAPR, fine, pay with their own cash.”

The new strategy would allow the University to fund renovation projects that HEAPR dollars would not, since HEAPR funding is tied to requirements, said Brian Swanson, assistant vice president of finance and accounting for University Services.

And since the operating budget isn’t tied to a bonding bill, he said, it makes approval for those funds more likely.

Pelowski also said he took issue with how this year’s HEAPR funds are being used. He said officials shouldn’t have restored the Mechanical Engineering building with the money, since he thinks it went beyond HEAPR’s reach.

This year’s proposal is just the first step, Beeson said. Asking to allocate more restoration funds into the operating budget “is the beginning of an important conversation” with legislators, he said, “and beginning this process is a good way to learn.”